The PatLit weblog covers patent litigation law, practice and strategy, as well as other forms of patent dispute resolution. If you love -- or hate -- patent litigation, this is your blog. You can contact PatLit by emailing Michael here

Tuesday, 5 April 2011

PCC Page 23: IPOff’s tentacles get some cross-examination?

The PatLit PCC Series, cunningly craft d by the Chartered Institute of Patent Attorneys (CIPA), seeks to explain how litigation works in the recently-revamped Patents County Court (PCC) for England and Wales, taking as its theme a dispute between Cautious Co and IPOff Ltd as to whether IPOff has infringed the IP rights of Cautious in its robotic octopus. In this episode, the 23rd, CIPA President Alasdair Poore reviews the strategic and other advantages of offering to settle the dispute before it goes too far ...

"First I should make an apology. It has been suggested that the PCC pages are intended to create the impression that litigation in the PCC is really rather complicated; that there are many pitfalls waiting to catch the unwary representative. Nothing could be further from the truth – there is absolutely no requirement to develop skills in writing intolerant correspondence or to develop elaborate strategies to trip up the other party. Indeed, doing so is more likely than not to result in sanctions rather than in obtaining a strategic advantage.

This week's PCC provides a welcome chance to add a reminder that there are some circumstances when the costs limit does not apply – CPR 45.41(2)(a) – where the Court considers that a party has behaved in a manner which amounts to an abuse of the court’s process. Incidentally, the limit also does not apply under the conditions in CPR 45.41(2)(b), that is where contested validity of the patent has been certified in previous proceedings. In that case, s.65(2) Patents Act 1977 provides that the person relying on validity of the patent as found in earlier proceedings is entitled to costs on a solicitor and own client basis (equivalent to the indemnity basis set out in CPR 44.4(1) -- but there will be more on certificates of contested validity and their impact in due course. Sorry if this sounds like more complication – no, proceedings should really be pretty straightforward, but that would be very boring, and not provide any interesting insights. So now for something on cross examination:

Readers will recall that last week (and after much ruminating and cogitating), Cautious’s patent attorney wrote to IPOff’s solicitor with a Part 36 offer. IPOff’s solicitor has since forwarded this to his somewhat belligerent client, seeking instructions. Not surprisingly, IPOff responds by email in a far from amused and good natured manner:

"Dear X

While you’re sipping tea in your cosy little office, I’m losing time and, more importantly money! What am I paying you for? You call that an offer? You can tell Cautious that he’s not getting his grubby little tentacles on my money and that I’ll fight him till the bitter end!!

I’m just waiting for the trial so that our silk can pin him to the wall.”

IPOff's solicitor puts down his cup of tea and takes a moment to reflect on the latest outburst from his client. Like Cautious’s patent attorney, he is considering what needs to be agreed at the forthcoming Case Management Conference (CMC). He sees though the fire and brimstone and deliberates over whether Cautious will want to cross-examine his client, and how he should resist it.

As noted previously, in accordance with CPR 63.23(1), the Patents County Court (PCC) will identify the issues and decide whether to make an order in accordance with PD 63 29.1. Only in exceptional circumstances will the PCC consider an application by a party to submit material in addition to that CPR 63.23(1). PD 63 29.1 provides that the Court may order any of the following:

The PCC will only make an order under paragraph 29.1 (including in relation to cross examination) if:

(1) in relation to specific and identified issues; and
(2) if the court is satisfied that the benefit of the further material in terms of its value in resolving those issues appears likely to justify the cost of producing and dealing with it (PD 63 29.2)

“These interlocking provisions represent a radical departure from previous English civil procedure, at least as it is practiced in the courts handling intellectual property claims. The provisions are a key element of the new procedure and its purpose in making intellectual property cases less expensive and quicker to resolve. The parties do not have a free rein to call any evidence they want on any topic. The court will control the procedure. Further material will only be permitted on identified points and only if it satisfies the cost benefit test in paragraph 29.2(2). If material has not been permitted in this way, CPR Pt 63.23(2) sets a significant hurdle in the way of its introduction into the case. It seems to me that one important consequence of the provisions is that, subject to proper safeguards, some relevant evidence will be excluded from trials. Merely because some evidence is relevant will not necessarily justify permission being given to adduce it. On the other hand the parties need to know that the court will give permission for evidence to be filed in a proper case since otherwise there will be a temptation to overload the statements of case with unnecessary material.”

In the form of order in that case, the PCC did not grant the parties permission to cross-examine witnesses at trial, because neither side sought an order for cross-examination. However, at trial issues arose which could have benefited from cross-examining witnesses (see the earlier decision in Dame Vivienne Westwood OBE v Anthony Edward Knight[2011] EWPCC 008)

When the claimant alleged that the defendant had deliberately mislead customers into thinking that they were buying genuine Vivienne Westwood goods rather than Mr Knight’s goods i.e. allegations of fraud and deliberate deception, the submissions were based on materials submitted to the court rather than cross-examination of Mr Knight. However, these inferences could also be explained by the defendant. Judge Birss QC said that to “address these issues properly would involve, amongst other things, embarking on an analysis of Mr Knight’s intentions…” and that to make a finding about Mr Knight’s state of mind without cross-examination “would not be fair” and duly declined to do so.

Likewise, in his submissions, Mr Knight made allegations that documents exhibited in the documents exhibited to the witness statement of the claimant’s main witness were fabricated. Judge Birss QC made it clear that if any of the evidence was untruthful, the defendant could and should have applied to cross-examine the witness.

The PCC’s approach to applications to cross-examine witnesses is thus summarised in the following words from the judge:

“The procedural scheme is more restrictive in dealing with such applications but in a proper case they can be made. An application on proper grounds could have been considered before trial and dealt with”

So IPOff’s solicitor concludes that it is unlikely that the PCC will reject an application to cross-examine, if IPOff continues to assert independent development. However, he will make the application anyway, as well as an application for experiments to demonstrate that Cautious's software does not work – and of course his application to transfer the whole proceedings to the Patents Court. He picks up the phone to call Cautious’s patent attorney with a view to discussing the proposed order".